Posted in: Comics | Tagged: Ad Populum, diamond, Sparkle Pop

Sparkle Pop's Objection To The Diamond Bankruptcy Settlement Plans

Sparkle Pop's Objection To The Diamond Bankruptcy Settlement Plans With Comic Book Publishers

Published Sat, 05 Sep 2026 06:57:10 -0500

Sparkle Pop, the company set up by Ad Populum, which bought the assets of Diamond Comic Distributors at bankruptcy auction, has filed an objection to the plan proposed by the Chapter 7 trustee and the Consignment Group publishers. JPMorgan Chase has also filed a reservation of rights. Although it says it is generally supportive of the settlement, the bank asserts a claim against the $619,410 proposed for release from the court registry to the trustee, as well as any funds released from Sparkle Pop's escrow. JPMorgan Chase says it is entitled to 75% of the remaining proceeds after trustee borrowings, statutory trustee fees, and certain professional fees have been paid. This will all now be heard on court on the 6th of October. Sparkle Pop states in legal filings;

"In actuality, however, all that has been accomplished is to extricate the Trustee and JPMorgan Chase from the consignment disputes while significantly increasing the remaining disputes (and litigation) between the Consignment Group Members and Sparkle Pop. The proposed settlement would require this Court to adjudicate every single aspect of the dispute between the Consignment Group Members and Sparkle Pop over goods located in Mississippi and over which the Trustee and the Estate no longer have any vested interest. If the purpose of this proposed settlement is to resolve the consignment disputes, it fails on every possible level, especially as it relates to Sparkle Pop. In particular, the proposed agreement imposes numerous requirements on Sparkle Pop without its consent, without proper remuneration for processing fees and storage fees that Sparkle Pop has incurred since December 2025, and without taking into account Sparkle Pop's interest in maintaining the security and processing of its working Warehouse in determining pik and pak services."

Sparkle Pop specifically objects to the following demands, as it defines them;

Sparkle Pop to completely relinquish its rights to most of the funds in the court registry and to remit nearly all of the funds that it is holding in escrow despite being owed (a) its processing fees for selling goods (an amount over $400,000.00) and (b) its rent and storage fees (an amount over $1 million);
Sparkle Pop to be forced to allow the Consignment Group Members to pick, pack, and pallet the consigned goods being held in its Mississippi warehouse (which they logistically cannot do) without any input from Sparkle Pop or payment to Sparkle Pop on a forced timeline to be invented by the Consignment Group Members; and
Sparkle Pop to continue to be subject to the third-party claims in the adversary proceedings and future unknown but meritless and unsubstantiated claims by the Consignment Group Members against it.

The warehouse still holds 8,250,936 units of consigned product, Sparkle Pop told the court. Industry reports have put the consignment pool at roughly $47 million in book value. Sparkle Pop says the consigned goods are mixed with other inventory inside an active 600,000-square-foot distribution centre, which they say makes it complicated for publishers to retrieve the consigned inventory on their own.

"The Warehouse is an approximately 600,000 square foot active distribution center and is not a storage facility where consignors can simply walk in and retrieve merchandise. The Warehouse has floor-to-ceiling warehouse racking, with substantial inventory stored at elevations requiring material-handling equipment and trained personnel. Much of the consignment inventory consists of heavy paper and comic products creating additional safety concerns when retrieving product from upper-level racking. The Warehouse also contains a bonded area, creating additional access, security, customs-compliance and inventory controlled requirements. Allowing outside representatives to enter the Warehouse and locate, pick move, pack and pallet their own inventory creates significant safety, liability, operational, inventory-control, and chain-of-custody risks."

It says it has already offered a simpler process: its own trained staff would retrieve and stage the inventory for a "reasonable market-based fee. Sparkle Pop claims unpaid processing fees of $433,270 and unpaid rent and storage through August 2026 of $1,000,000. Rent, it says, continues at about $125,000 a month. Sparkle Pop has not been paid rent since November or December 2025, depending on the affidavit. In March 2026, it filed an administrative claim for $580,000, which it says has continued to accrue. In an earlier affidavit from Ad Populum's Joel Weinshanker, included in the filing, he says the goods occupy so much space that Sparkle Pop has rented extra storage for its own product, bought additional insurance, and spends extra labour each week.

"If this Court were to approve the proposed settlement (negotiated without Sparkle Pop's involvement and which wholly discounts Sparkle Pop's interests), Sparkle Pop would not only have to relinquish its interests in the registry and escrow (without receiving its processing fees of $433,270), it would also [be] compelled to turn over the consigned goods to the Consignment Group Members on their sole terms and conditions (without receiving its pik & pak fees and rent/storage fees of $1,000,000) and still remain subject to potential future litigation from the Consignment Group Members over unsubstantiated and meritless claims…Any settlement that will result in more litigation and oversight before and by this Court should not be approved."

Sparkle Pop also objects to a provision that, if it later wins a judgment against a settling publisher for rent or similar charges, that publisher would receive an administrative claim against the Diamond estate equal to 25 per cent of the judgment. The company says the settlement "does not resolve the pending litigation and, in fact, expands it," because the publishers would keep prosecuting adversary claims against Sparkle Pop and could file new ones. Sparkle Pop paints itself as stuck in the middle.

"Ever since Sparkle Pop purchased the Debtors' assets, it has been unfairly placed in the middle of the dispute between the consignors and the Debtors… Without a judicial determination of ownership, Sparkle Pop could not have and still cannot release the consigned goods to one party without exposing itself to legal claims from the other parties."

The Odyssey to get comic book publishers' stuff back is, it seems, still far from over. You can use this Diamond tag to keep up with the latest on Bleeding Cool. Here's a timeline if you want to catch up…